Hong Kong Stock Exchange Chairman Hopes Central Won’t Be Occupied

Despite a few clouds hanging over Hong Kong Exchanges & Clearing Ltd. (HKEx), the operator of Hong Kong’s bourse took time to celebrate Monday with a fete marking its 14th anniversary (Hong Kong’s exchange has a long history, but the current operating entity merged and listed in 2000).

The Hong Kong skyline at night.

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Hong Kong’s torrential summer rains besides, those clouds included, in the opinion of HKEx Chairman C.K. Chow, the risks posed by Occupy Central. The pro-democracy coalition is promising civil disobedience if the nominating process for the city’s chief executive isn’t opened up.

“I don’t want to discuss particularly when that would happen,” said Mr. Chow at the anniversary reception, responding to a question on HKEx’s preparedness for potential Occupy Central activity in Hong Kong’s business district. “Of course, I hope that won’t happen. We hope that political reforms can be discussed under a legal system.”

Mr. Chow continued:

What’s most important to Hong Kong as a financial centre is local and international investor confidence. Only when they have confidence will Hong Kong be able to boost its status as an international financial centre. What I most fear is illegal actions raising Hong Kong’s political risk and cutting investor confidence in Hong Kong, which would be very disadvantageous for us.

HKEx has “contingency plans to cover many possible scenarios,” Mr. Chow said. “If an emergency emerges, we will be prepared and will try to minimize the impact on the market.”

Occupy Central is a hot topic of discussion due to a referendum which the group helped organize and is currently underway on issues including how the Hong Kong chief executive should be nominated. Hong Kong’s chief executive is currently chosen by a 1,200-member committee composed largely of pro-Beijing organizations and business groups.

On the brighter side, Mr. Chow also described developments in a planned program whereby certain stocks listed in Hong Kong can be traded in Shanghai, and vice versa. 215 brokers who together contribute 86% of market turnover in Hong Kong’s stock market are interested in trading mainland A shares under the program, Mr. Chow said.